RUIZ v. NATIONSTAR MORTGAGE LLC

Filing 32

MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE signed by MAG/JUDGE JOI ELIZABETH PEAKE on 8/26/2013, that the Motions to Dismiss filed by Defendant Lindsey R. Davis [Doc. # 14 ], Defendants Hutchens, Senter & Britton, PA and "Substitute Trustee aka Natasha M. Barone" [Doc. # 22 ], and Defendant Nationstar Mortgage LLC [Doc. # 29 ], be granted as set out above and that this action be dismissed. (Lloyd, Donna)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
ERICK AGUILAR RUIZ,
Plaintiff,
v.
NATIONSTAR MORTGAGE LLC,
SUBSTITUTE TRUSTEE Natasha M. Barone,
HUTCHENS, SENTER & BRITTON, PA,
FLICK MORTGAGE INVESTORS,
GMAC BANK, LINDSEY R. DAVIS,
Defendants.

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1:12CV272

MEMORANDUM OPINION AND RECOMMENDATION OF
UNITED STATES MAGISTRATE JUDGE
This matter is before the Court on the Motions to Dismiss filed by Defendant Lindsey
R. Davis [Doc. #14], Defendants Hutchens, Senter & Britton, PA and “Substitute Trustee aka
Natasha M. Barone” [Doc. #22], and Defendant Nationstar Mortgage LLC [Doc. #29].1
Plaintiff Erick Aguilar Ruiz, proceeding pro se, brings this action raising various claims related
to a mortgage foreclosure action in state court. For the reasons set out below, the Court
recommends that Defendants’ motions be granted and that this action be dismissed.
I.

FACTS, CLAIMS, AND PROCEDURAL HISTORY
Plaintiff Ruiz alleges in his Complaint that his federal and state constitutional rights were

violated by Defendants by the “fraud, deprivation, theft and sale of plaintiff’s real [legal]
property described as 829 Gardengate Road Greensboro, NC.” (Compl. [Doc. #2] at 1.) This

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Defendant GMAC BANK has been terminated as a Defendant due to its filing of bankruptcy. (Order
of J. Tilley [Doc. #28].)

property was Plaintiff’s residence. Plaintiff also lists several federal criminal statutes allegedly
violated by Defendants, including 18 U.S.C. § 1861, 18 U.S.C. §§ 241 and 242, and 18
U.S.C. § 3571. He also relies upon Article I, sections 1, 16, and 21 of the North Carolina state
constitution, and North Carolina General Statute § 25-3-505 (2011). (Id. at 2.)
Plaintiff alleges that on July 30, 2011, he sent to Flick Mortgage Investors and Nationstar
Mortgage, Inc. certain documents in an attempt to “clear up account errors.” (Id. at 3.) He then
“discovered contract/mortgage fraud and potential Robo-Signing & Stamping” in his mortgage
documents. (Id.) Plaintiff then discusses the state court proceedings which took place in
Greensboro, N.C. He alleges that state court administrator Teresa Lawson “mishandled
affidavits of record.” Plaintiff states that his native language is Spanish and that he “was not
given court appointed bi-lingual interpreter” for the February 10, 2012, court hearing which
“barred him from comprehending” matters at the hearing. (Id. at 3-4.) The superior court judge
presiding over this hearing was Defendant Lindsey R. Davis. Plaintiff alleges that Defendant
Davis “granted foreclosure order on plaintiff’s homestead, without reviewing submitted
evidence, exhibits, and court appointed bi-lingual interpreter.” (Id. at 4.) Plaintiff also claims
that the “pooling & servicing agreement”2 between Flick Mortgage Investors and GMAC Bank
was not disclosed to him at closing. (Id. at 5.) He says that this non-disclosure caused his deed
of trust and promissory note to be an “ultra vires contract.” Plaintiff also claims that at the time
of the foreclosure order, the Defendants should not have proceeded with the sale of his home

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Plaintiff refers to “Exhibit C” to his Complaint, which appears to be a copy of an index of a Pooling
and Services Agreement filed apparently with the Securities and Exchange Commission by GMAC Commercial
Mortgage Securities, Inc. on July 11, 2002.

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because they “could not verify or locate original trustee of record, thereby voiding substitute
trustee’s power of sale clause, making foreclosure of plaintiff’s real legal property unlawfully.”
(Id.) Plaintiff seeks damages and declaratory relief, in addition to the Court quieting title of his
former residence in Plaintiff’s name. Defendants have filed Motions to Dismiss, which the
Court considers below.
II.

DISCUSSION
A.

Defendant Davis’ Motion to Dismiss

Defendant Davis moves to dismiss based on Federal Rule of Civil Procedure 12(b)(1) for
lack of subject matter jurisdiction, 12(b)(2) for lack of personal jurisdiction, 12(b)(5) for
insufficient service of process, and 12(b)(6) for failure to state a claim upon which relief may be
granted. Plaintiff refers in his Complaint to the February 10, 2012 hearing held in Guilford
County, North Carolina Superior Court. Defendant Davis attaches to his Motion a copy of the
Order Allowing Foreclosure [Doc. #15-1], which Defendant Davis signed on the date of the
hearing. According to the Order, Plaintiff appeared on his own behalf and had appealed from
the November 16, 2011 Order of the Guilford County Clerk of Court allowing the foreclosure
of his property to proceed.3

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Matters outside of the pleadings may be considered by the Court when deciding motions under Rule
12(b)(1), 12(b)(2), 12(b)(4), and 12(b)(5) without converting the motion to one for summary judgment. WilsonCook Med., Inc. v. Wilson, 942 F.2d 247, 252 (4th Cir. 1991) (“Converting a motion to dismiss into a motion for
summary judgment, of course, applies only to a motion made pursuant to Rule 12(b)(6).”); see also Evans v. B.F.
Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999); Richmond, Fredericksburg & Potomac R.R. Co. v. United States,
945 F.2d 765, 768 (4th Cir. 1991); Kerns v. United States, 585 F.3d 187, 193 (4th Cir. 2009); Nat’l Alliance for
Accessibility, Inc. v. Macy’s Retail Holdings, Inc., No. 1:11CV877; 2012 WL 5381490 (M.D.N.C. Oct. 30, 2012)
(Rule 12(b)(1)).

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Defendant Davis, as the state court presiding judge, found the following as facts as set
out in the Order. Plaintiff executed a promissory note (“the Note”) on June 18, 2002, payable
to Flick Mortgage Investors, Inc., which was secured by a deed of trust executed by Plaintiff
pledging the real property at 829 Gardengate Road, Greensboro, North Carolina, as security for
repayment of the Note. (Order [Doc. #15-1] at 1.) The Note was transferred to GMAC Bank,
then to GMAC Mortgage Corporation, and finally to Nationstar Mortgage, LLC, the current
holder. The deed of trust contained a power of sale provision which allowed the trustee or
substitute trustee to foreclose upon the property in the event of default. The Note was in
default because the last payment made was for the period ending November 1, 2010. Notice
of the action was served on all of the record owners and any other person against whom the
Note holder intended to assert liability for the debt. Plaintiff had no valid legal reason why the
foreclosure should not begin. Based upon those facts, Defendant Davis found as a matter of
law that the foreclosure should proceed as provided by law and the deed of trust. He ordered
that Plaintiff’s appeal be dismissed.
Defendant Davis argues that all claims against him should be dismissed because the
Court lacks subject matter jurisdiction over Plaintiff’s Complaint under the Rooker-Feldman
doctrine. The Rooker-Feldman doctrine provides that “a party losing in state court is barred
from seeking what in substance would be appellate review of the state judgment in a United
States district court, based on the losing party’s claim that the state judgment itself violates the
loser’s federal rights.” Johnson v. De Grandy, 512 U.S. 997, 1005-06 (1994) (citing District of
Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983), and Rooker v. Fidelity Trust

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Co., 263 U.S. 413, 416 (1923)). The Rooker–Feldman doctrine precludes lower federal courts
from considering “cases brought by state-court losers complaining of injuries caused by
state-court judgments rendered before the district court proceedings commenced and inviting
district court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic
Indus. Corp., 544 U.S. 280, 284 (2005). This doctrine is based on the principle that federal
district courts do not have jurisdiction to review decisions of state courts. Id. at 291-92. “The
key inquiry is not whether the state court ruled on the precise issue raised in federal court, but
whether the ‘state-court loser who files suit in federal court seeks redress for an injury caused
by the state-court decision itself.’” Willner v. Frey, 243 F. App’x 744, 747 (4th Cir.2007) (quoting
Davani v. Virginia Dep’t of Transp., 434 F.3d 712, 718 (4th Cir.2005)). Claims covered by this
doctrine include not only those presented to and actually decided by the state court, but also to
constitutional claims that are “inextricably intertwined with” those questions ruled upon by the
state court. Plyler v. Moore, 129 F.3d 728, 731 (4th Cir. 1997). The doctrine precludes review
of lower state courts as well as the state’s highest court. Jordahl v. Democratic Party of Va., 122
F.3d 192, 199 (4th Cir. 1997).
All of the allegations against Defendant Davis relate to his judicial actions in state court
in presiding over the appeal of the order of the Clerk of Court allowing the foreclosure of
Plaintiff’s property. Plaintiff complains that Defendant Davis “granted foreclosure” on his
home without reviewing the evidence submitted, failed to appoint a court interpreter, and
violated his due process rights. (Compl. [Doc. #2] at 4.) By these allegations, Plaintiff seeks to
challenge “the sufficiency of the state foreclosure order,” a challenge that is foreclosed by the

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Rooker-Feldman doctrine in this Court. See Harris v. Suntrust Mortg., Inc., No. 12CV378, 2013
WL 1120846, at *6 (M.D.N.C. Mar. 18, 2013) (dismissing all claims arising out of a mortgage
foreclosure against state Clerk and Assistant Clerk of Superior Court based upon RookerFeldman doctrine, among other bases). Plaintiff’s remedy for these and the other alleged defects
in the state foreclosure proceeding was to appeal through the state judicial system and then seek
review in the Supreme Court of the United States. This Court lacks subject matter jurisdiction
to review the state court’s order. Accordingly, all claims against Defendant Davis should be
dismissed pursuant to Federal Rule of Civil Procedure 12(b)(1).4
B.

Motions to Dismiss filed by the Remaining Defendants

Plaintiff does not particularize his claims against the remaining Defendants in his
Complaint. Therefore, the Court will discuss those claims together. All of Plaintiff’s claims
against these Defendants relate to, in Plaintiff’s words, “violations of constitutionally protected
rights, and the fraud, deprivation, theft and sale of plaintiff’s real [legal] property described as
829 Gardengate Road Greensboro, NC.” (Compl. [Doc. #2] at 1.) The declaratory relief and
damages Plaintiff seeks are “for injury caused by loss of homestead” and “failure to execute due
process of law, redress, equal protection, privileges and immunities” guaranteed by the

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The Court also notes that as a North Carolina Superior Court Judge, Defendant Davis is entitled in his
individual capacity to absolute judicial immunity from damages for the judicial actions he took in connection with
Plaintiff’s foreclosure action over which he properly exercised jurisdiction. See N.C. Gen. Stat. § 45-21.16(d1)
(2011) (providing for appeal to superior court of clerk’s order allowing foreclosure); Harris, 2013 WL 1120846,
at *6 (court clerk and assistant clerk entitled to absolute judicial immunity for their role in mortgage foreclosure).
In addition, in his official capacity, Defendant Davis is entitled to the immunities “that the governmental entity
possesses.” Hafer v. Melo, 502 U.S. 21, 25 (1991). Therefore, Defendant Davis in his official capacity is entitled
to the protection afforded by the Eleventh Amendment which “effectively confers an immunity from suit.”
Puerto Rico Aqueduct and Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144 (1993); Nivens v. Gilchrist,
444 F.3d 237, 249 (4th Cir. 2006).

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Constitution of North Carolina, all related to the foreclosure action. (Id. at 6.) The relief
Plaintiff seeks includes quieting title and placing him in “peaceable possession” of the property.
(Id. at 7.) In sum, as to the remaining Defendants, Plaintiff is “complaining of injuries caused
by state-court judgments rendered before the district court proceedings commenced and inviting
district court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic
Indus. Corp., 544 U.S. 280, 284 (2005). Such review is prohibited by the Rooker-Feldman
doctrine. Id.; see also Smalley v. Shapiro & Burson, LLP, No. 12-1266, 2013 WL 1613219 (4th
Cir. April 16, 2013). All claims against the remaining Defendants should therefore be dismissed
pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction.5
Finally, the Court notes that Plaintiff relies upon several federal criminal statutes for his
claims. However, there is no private right of action pursuant to 18 U.S.C. § 241 or § 242. Bey
v. North Carolina, No. 3:12CV454, 2012 WL 3528005 (W.D.N.C. Aug. 14, 2012); see Doe v.
Broderick, 225 F.3d 440, 447-448 (4th Cir. 2000) (“The Supreme Court historically has been
loath to infer a private right of action from ‘a bare criminal statute.’” (quoting Cort v. Ash, 422
U.S. 66, 80 (1975))). Plaintiff also cites 18 U.S.C. § 3571 as pertaining to violations of oath of
office. However, that statute concerns sentences of fines and does not provide any basis for a
valid claim. Plaintiff also relies upon 18 U.S.C. § 1861, which pertains to deception of
prospective purchasers of public land of the United States. Plaintiff makes no allegation that his

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All of the Defendants also raise valid objections to the lack of proper service in this case. See N.C. Gen.
Stat. § 1A-1, Rule 4. Therefore, Plaintiff’s claims would also be subject to dismissal for lack of personal
jurisdiction under Rule 12(b)(2) and for insufficiency of service of process under Rule 12(b)(5). However, given
the Court’s conclusion that all of Plaintiffs claims should be dismissed pursuant to the Rooker-Feldman doctrine
as set out above, the Court need not consider further whether to allow Plaintiff the opportunity to correct any
defects in service of process or show cause for failure to make timely service.

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claims involve public land. Thus, these claims based upon federal criminal statutes would also
be subject to dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6).
III.

CONCLUSION
IT IS THEREFORE RECOMMENDED that the Motions to Dismiss filed by

Defendant Lindsey R. Davis [Doc. #14], Defendants Hutchens, Senter & Britton, PA and
“Substitute Trustee aka Natasha M. Barone” [Doc. #22], and Defendant Nationstar Mortgage
LLC [Doc. #29], be granted as set out above and that this action be dismissed.
This, the 26th day of August, 2013.

/s/ Joi Elizabeth Peake
United States Magistrate Judge

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